Last updated on May 13th, 2020
If you’re a Canadian Chase credit cardholder, this could be your happy face. In the world of credit card news, it’s not often that we see a story with a happy ending; read on for some news that may very well put a smile on your face – especially if you’re a Canadian Chase customer! J.P. Morgan Chase Bank has taken an extraordinary step, forgiving all outstanding debt owed by cardholders of the two Canadian credit card offers from Chase, in an effort to ease their exit from the Canadian market. In March of 2018, the US-based bank announced that after thirteen years, they were closing the two Visa card offers they had in place and would leave the Canadian credit card market. All affected accounts were closed by March of 2018, and cardholders of the Amazon.ca Rewards Visa Card and the Marriott Rewards Premier Visa Card were no longer able to use the line of credit associated with their card, although if they had a balance they still received a monthly bill. On August 8 of 2019, that all changed: “Chase made the decision to exit the Canadian credit card market,” the bank said in a statement. “As part of that exit, all credit accounts were closed on or before March 2018. A further business decision has been made to forgive all outstanding balances in order to complete the exit.”
How Do Canadian Cardholders Feel?
Canadian customers who had outstanding balances on their Chase credit cards are ecstatic, and rightfully so. Douglas Turner, a resident of Coe Hill, Ontario, told the Canadian Broadcasting Corporation that he was, “sort of over the moon all last night, with a smile on [his] face.” He says he had a balance of C$6,157 left to pay on his card, and when he received a letter from the bank he worried he’d missed a payment. To his surprise and delight, he was informed that he had not only had his debt wiped, his latest payment had also been reimbursed. “This stuff doesn’t happen with credit cards,” Turner says. “Credit cards are horror stories.” According to the Canadian Bankers Association, most Canadians pay of their credit card balances each month; out of Canadian cardholders who keep a balance, 47% pay more than the minimum payment – and 15% pay it off most of the time. In stark contrast, U.S. consumer debt has risen almost exponentially, topping $4 trillion for the first time in early 2019. It would appear that Chase has decided to consolidate its focus to the U.S. market, as they’ve seen record profits recently and the American bank has made a commitment to open 400 new branches over the next five years.
Why Is Chase Being So Generous?
While Chase has not explained the reasoning behind their unprecedented move, the company has said that this is the best decision both for the bank and for customers, and has hinted that debt forgiveness is cheaper in the long run rather than continuing to process payments or hire a third-party debt collector to do so for them. Typically, a card issuer will sell the debt to a third-party collector in order to recoup some of their losses, but it may be that forgiving this debt would speed the process along as Chase exits the Canadian market. This way, everybody benefits – and the bank is able to stir up some goodwill, at least from their Canadian cardholders. As one might expect, Canadian customers are thrilled by this. Their American counterparts may be slightly less thrilled, though, as this courtesy hasn’t been extended to U.S. cardholders. Time will tell if Chase will be as generous with American debt, the next time they close a credit card offer.